The mouse and the elephant. (Costa Rican airline Lacsa and U.S. competitors for Miami route)

Costa Rica and its flag airline, Lacsa, feel the pinch of a bilateral that permits 6 U.S. competitors on the prized Miami route. By Joan M. Feldman.

San Jose, Costa Rica-The U.S. didn't call out the Marines when Costa Rica recently challenged American Airlines' entry into the Miami-San Jose market. But before the dispute was finished, several important people, reportedly including the U.S. Secretary of State and National Security Adviser, had become involved. The U.S. had taken steps to reduce the Costa Rican national airline's route access. So tiny Costa Rica-population 2.8 million-backed down. Humongous American started service. The Central American country had found out, again, what a liberal bilateral is supposed to mean.

Costa Rica did not even have an aviation bilateral with the U.S. prior to 1979. Air services between the two were based on the traditional trading principles of comity and reciprocity. Lineas Aereas Costarricenses SA (Lacsa), the flag airline, held a nonstop monopoly. Pan Am was the sole U.S. airline in the market but Costa Rica only allowed it to operate via an intermediate point. Despite the monopoly, Lacsa was a perpetual money loser.

Then Pan Am moved its Central American hub from Guatemala to Miami, leaving a gap in the market. There was a 900% devaluation of Costa Rica's currency, which resulted in a drop in traffic but an even-bigger drop in costs. These events gave Lacsa some confidence. So in 1979, it supported a bilateral agreement that included double disapproval of fares, unrestricted capacity, unrestricted right of designation and wide-open charters. it was exactly the kind of bilateral, the so-called Belgian model, that the U.S.' bigger aviation partners were refusing to accept but smaller countries such as the Netherlands, Israel and Jamaica were signing in exchange for new U.S. routes that they could not hope to obtain otherwise. Says Paulo Manso, Lacsa's commercial planning manager, "We had to play the game."

Rodolfo Mendds Mata was Minister of Transportation at the time. His party recently won the national election and Mendis again will hold high position, perhaps chief of staff to the new President, Rafael Calderon Fournier. "We had to sign a liberal bilateral with the U.S.," he recalls. "It was that or none at all."

Mendes had several reasons for wanting the agreement. He regarded Lacsa's monopoly as "an obstacle to tourism," he told ATW. Costa Rica has been trying to reduce its dependence on agriculture, particularly coffee, for many years. Also, he "thought Lacsa had to fly to new places [in the U.S.] to pay for its new equipment-it was replacing BAC-111s with Boeing 727s." Looking back, he still feels that he did the right thing. "For the first 1 0 years, the bilateral has been good for Costa Rica. …

...nationals living in CostaRica and also indirectly...characteristics of Lacsa are very much likened to CostaRica's general trend...emphasizing the role of Lacsa essentially as the...the tourist boom in CostaRica. We have a strong...

...fighting with its pilots' union, LACSA, the national airline, is...to arrive in late July, give LACSA a fleet of 12, double its capacity...22,000 tourists a year to CostaRica before its bankruptcy last year. LACSA is flying three times weekly...

LACSA, the national airline, with funding from...Sanyo Oil), is spreading its wings beyond CostaRica by setting up its base in San Jose as a...based marketing manager Larry Waterman. LACSA in 1991 expanded its flights by 30%, taking...

Lacsa has expanded its service between Miami and Managua with five nonstop flights...flies between the two cities four times weekly, with a stop in San Jose, CostaRica, for a total of nine weekly flights. Details: 305-871-0144, 504...

...product, a high volume screening test which CostaRica uses to ensure the health of its newborns...president of Biomerica, 714-645-2111. Lacsa expands air service. Lacsa, the airline of CostaRica, has expanded service from the U.S...

...vessels. Jetting there Lacsa, the national airline of CostaRica, has direct daily...low as $508. On all Lacsa flights there is only...information, contact Lacsa at the appropriate...Jose, the capital of CostaRica and the largest city...

...Government has urged CostaRica to "negotiate directly...suggested U.S. aid to CostaRica might be affected if the...320 million credit to CostaRica from the Inter-American...exclusive cellular rights. Lacsa airline in December introduced...

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